East End Crossing Wins Bond Buyer Deal of the Year

Recognizing the innovative P3 approach to project delivery and financial structure for a major US infrastructure project, the Bond Buyer awarded the Indiana Finance Authority's private activity bonds for the East End Crossing the Deal of the Year Award at its annual event held at the Waldorf Astoria hotel in New York City.  Notably, this is the first P3 transaction to win the award.
The $1.2B East End Crossing, a portion of the $2.6B Ohio River Bridges project, one of the largest transportation undertakings in the U.S. and the first availability payment P3 for the Indiana Finance Authority, will improve connecting roadways and provide a new $1.18B toll bridge across the Ohio River between Indiana and Kentucky, connecting I-265/KY 841 with S.R. 265.
Indiana Finance Authority acts as the public sponsor under the availability payment contract which was signed at the end of last year as well as the conduit issuer for the private activity bonds.  The debt portion of the financing is made up of two series of tax exempt private activity bonds.  Series A, in the principal amount of $482,310,000, has maturities starting in July 2035 with final maturity in January 2051; pricing for the long bonds is between 4.56% and 4.96%.  A construction financing tranche in the principal amount of $194,495,000, has a nominal maturity of January 2019, but is callable earlier as milestone payments are achieved; baseline substantial completion is scheduled for the end of October, 2016.  This Series B short-term piece is priced to yield 2.28%.  Lead underwriter for the deal is Bank of America Merrill Lynch, with JP Morgan, Goldman and RBC Capital as co-senior underwriters.  Equity members will contribute approximately $78 million towards project costs.  In conferring the award, the Bond Buyer noted the unique structure of the short term pabs which are payable from IFA's milestone payments and suggested that this innovative approach will prove to be a template for future transactions.
Kendra York, Public Finance Director for the state of Indiana, accepted the award, noting Governor Mike Pence’s commitment to using tools such as P3s to foster economic development and to improve the lives of residents of the Hoosier state.
This recognition comes on the heels of the East End Crossing winning the ARTBA "Project of the Year," as but one of a sweep of awards in the July 26 25th anniversary awards dinner, which also recognized Ms. York as "Public-Sector Entrepreneur of the Year" and Matt Walsh, among the equity members of the winning East End Crossing concessionaire/developer team.
Indiana continues to lead the P3 market, as it expects proposals for its follow-on availability payment concession, the I-69 Section 5 project mid-January and recently issued an RFQ for its share of the Illiana Expressway, also a bi-state project with the Illinois Department of Transportation.

Indiana Finance Authority Publishes the Request for Proposals for the East End Crossing Project

On July 31, 2012, the Indiana Finance Authority (“IFA”) issued its Request for Proposals to its previously-shortlisted four teams for the East End Crossing, part of the Louisville-Southern Indiana Ohio River Bridges Project located in Southern Indiana and the greater Louisville, Kentucky metropolitan area.

The broader Ohio River Bridges Project consists of improvements to connecting roadways, and most prominently, will provide two new toll bridges across the Ohio River:  the “Downtown Bridge” – a new bridge carrying I-65 and upstream on the Ohio River from the existing Kennedy Bridge – and the “East End Bridge” – also a new bridge connecting I-265/KY 841 with S.R. 265 in Indiana.  IFA is developing the East End Crossing as a public-private partnership, in close coordination with the Indiana Department of Transportation and in cooperation with the Commonwealth of Kentucky and its agencies, which are separately procuring the Downtown Bridge portion of the broader Ohio River Bridges Project.

The East End Crossing involves construction of the East End Bridge and approaches on both the Kentucky and Indiana sides of the Ohio River.  The selected proposer will develop, design, build, finance, operate and maintain the East End Crossing through an availability payment concession.

IFA shortlisted four teams in April 2012, and each team has participated actively in several industry review sessions, which helped inform today’s final “RFP” documents.  Issuance of the RFP continues IFA’s on-time track record during this procurement, emphasizing the State of Indiana’s collective commitment to advancing the East End Crossing on time and by the committed deadlines.

Proposals are due from the shortlisted proposer teams on October 26, 2012.  IFA anticipates a commercial closing on the 35-year term Public-Private Agreement by mid-December.

The four shortlisted teams are:

  • East End Mobility Partners (joint venture of SNC-Lavalin Capital, John Laing Investments Limited and Zachry Resources, Inc.), with Tutor Perini Corporation, Zachry Construction Corporation and SNC-Lavalin Transportation USA, Inc. teaming as the design-builder, and including Frontier Kemper Constructors Inc., ARUP USA, Inc. and Daelim Industrial Co, Ltd., among others.
  • Ohio River Mobility Group (joint venture of ACS Infrastructure Development, Inc., Hochtief PPP Solutions North America, Inc. and Skanska Infrastructure Development, Inc.), with Skanska USA Civil Southeast, Inc., Flatiron Constructors, Inc. and Dragados USA, Inc. teaming as the design-builder, and including URS Corporation and T.Y. Lin International as the designers, and with others.
  • Ohio River Transportation Partners (joint venture of InfraRed Capital Partners Limited, Balfour Beatty Capital and Kiewit Development Company), with Ohio River Transportation Constructors East (Kiewit Infrastructure Co., Traylor Bros., Inc., Massman Construction Co. and Kokosing Construction Company, Inc.) teaming as the design-builder, and including Ohio River Transportation Designers as the joint-venture design team (HNTB Corporation and Parsons Brinckerhoff), and with others.
  • WVB East End Partners (joint venture of Walsh Investors, LLC, VINCI Concessions S.A.S. and Bilfinger Berger PI International Holding GmbH), with Walsh Construction Company and VINCI Construction Grand Projets teaming as the design-builder, and including Jacobs Engineering Group, Inc. as the designer, and with others.

John Smolen co-authored this entry.

Indiana Finance Authority Issues RFQ for East End Crossing

On March 9, 2012, the Indiana Finance Authority, an independent instrumentality in cooperation with the Indiana Department of Transportation, issued a Request for Qualifications (RFQ) soliciting statements of qualifications from prospective proposers to develop, design, build, finance, operate, and maintain a tolled bridge facility and associated roadway facilities crossing the Ohio River from Clark County in southeastern Indiana into Jefferson County, Kentucky (the “East End Crossing”) through an availability payment concession.

The East End Crossing involves the construction of the approximately 3.3-mile Gene Snyder Freeway (KY 841) approach to a new East End Bridge on the Kentucky side in Eastern Jefferson County, including an approximately 2,000-foot tunnel; the construction of an approximately 2,500-foot, 4-lane new East End Bridge (which can accommodate six lanes) located about eight miles east of downtown Louisville; and the construction of the approximately 4.1-mile Lee Hamilton Highway (SR 265) approach to the East End Bridge in Indiana.

Statements of qualifications are due on April 9, 2012.

The East End Crossing is just one of two ongoing procurement processes that make up the larger Ohio River Bridges Project to be developed in coordination with the Kentucky Transportation Cabinet.  Since the Ohio River Bridges Project links Indiana and Kentucky, it requires the cooperation and partnership of both states and the cities of Louisville and Jeffersonville.

Nossaman attorney Wayne Corbett authored this post.